Finance: Economic activity news in Portugal

Secretary-General of the Socialist Party (PS) José Luís Carneiro launched a sharp critique of Prime Minister Luís Montenegro during the party's rentrée in Olhão. Carneiro questioned the government's strategic direction, specifically demanding transparency regarding the state's recent acquisition of a 13.7% stake in Redes Energéticas Nacionais (REN). He also announced that the PS will request a parliamentary review of the new organic law for the National Institute of Medical Emergency (INEM).

The Portuguese state is returning to the capital of the power-grid operator Redes Energéticas Nacionais (REN) by purchasing a 13.7% stake from the investment firm Pontegadea. The acquisition, handled by the state holding company Parpública, marks a strategic move to regain influence over national electricity and gas networks. Prime Minister Luís Montenegro described the investment as a way to protect national interests and manage energy costs.

Telecommunications operator Meo has secured an additional 250 million euros in funding. The company justified the move by citing insufficient cash flow to cover debt interest and lower productivity compared to market competitors, despite simultaneously planning a 30% reduction in its workforce.

A new fuel station operator called Nova has entered the Portuguese market, opening 15 locations in under ten months. Founder Ricardo Coimbra plans to reach 50 stations within three years and is currently targeting acquisitions of sites dissatisfied with the potential merger between Galp and Moeve.

The investment firm Apollo Global Management has reached an agreement to acquire the European low-cost airline EasyJet for approximately 6.6 billion euros. The deal follows the withdrawal of the competing bidder, Castlelake, which exited the process without providing a formal reason. This acquisition concludes months of uncertainty for the airline as the aviation sector navigates rising fuel costs.

The Portuguese Development Bank (Banco Português de Fomento or BPF) and the Mutual Guarantee Society (Sociedade de Garantia Mútua or SGM) have launched a new 1.5 billion euro financing line called 'Impulsar Portugal'. The initiative supports corporate treasury and investment with funding of up to 25 million euros per company. Applications are available through participating commercial banks and are divided into four pillars, including new business creation and technical guarantees.

The five largest banks in Portugal recorded combined profits exceeding 2.5 billion euros in the first half of 2026. While this figure represents a decline of more than 3% compared to the same period in 2025, banks like Santander, BPI, and Novo Banco saw individual profit drops exceeding 13%.

Novo Banco reported a 15.6% decline in net profits to 367.2 million euros for the first half of 2026. The bank attributed the decrease to extraordinary costs associated with its sale to the French group BPCE and a higher effective tax rate.

The Association for Economic and Social Development (Associação para o Desenvolvimento Económico or SEDES) has warned that the agreement between Galp and Moeve regarding the Sines refinery carries serious implications for Portugal. The association urged the government to use its sovereign powers to safeguard the refinery's viability, citing its role as a strategic national asset.

Portuguese companies have until December 31 to claim funds from the Labour Compensation Fund (Fundo de Compensação do Trabalho or FCT). As of June, 476.6 million euros remained unmobilized, representing 73% of the total funds available for training and severance support.

Several large Portuguese companies have released their first-half results for 2026, showing varied performance across sectors. While the utility company EDP and the bank Millennium BCP reported profit increases of 3% and 12.7% respectively, the retailer Jerónimo Martins and the industrial firm Corticeira Amorim saw their profits decline.

Air France-KLM and Lufthansa have submitted binding proposals to acquire a 49.9% stake in the Portuguese flag carrier, TAP Air Portugal. The state-owned holding company Parpública, which manages the government's business interests, will now evaluate the bids based on financial and strategic criteria before submitting a report to the government within 30 days.

Minister of Economy and Territorial Cohesion Manuel Castro Almeida has guaranteed that Portugal will fully invest all funds from the Recovery and Resilience Plan (RRP) by the August 31 deadline. Despite some pending milestones, the government is implementing an overbooking strategy to ensure no money is returned to Brussels.

The General Confederation of Portuguese Workers (Confederação Geral dos Trabalhadores Portugueses or CGTP) is demanding an immediate increase of the national minimum wage to 1,050 euros. The union rejected postponing the discussion until 2027, citing the current economic reality faced by workers and the government's recent openness to reviewing wage policies.

The Portuguese government is moving forward with the 3.9 billion euro acquisition of three FREMM EVO frigates from the Italian company Fincantieri. While officials anticipate a significant return for the national economy, representatives from the domestic defence industry have expressed uncertainty regarding the extent of local participation in the project.

During a state visit to Cape Verde, the President of the Republic, António José Seguro, announced a 100 million euro credit line to support Portuguese companies investing in the archipelago. The initiative aims to strengthen bilateral economic cooperation, with a specific focus on innovation, the blue economy, and new business projects.

Former government ministers are urging action regarding the pending deal between Galp and Moeve, warning that Portugal risks losing control of its only oil refinery in Sines. Experts cited concerns over reduced market competition and potential costs to taxpayers if the sale proceeds without government oversight.

Update: Minister Luís Neves faces investigation over trailer case

Minister of Internal Administration Luís Neves is under scrutiny after the Judicial Police (Polícia Judiciária or PJ) found evidence of potential abuse of power and embezzlement. The investigation concerns the handover of a seized trailer to a contractor who previously held public contracts with the PJ, with Neves promising to gather documents to clarify the situation.

The Competition Authority (Autoridade da Concorrência or AdC) has recommended that the Bank of Portugal create a comparison tool for bank deposit interest rates. The AdC believes this measure would encourage customer mobility between financial institutions and improve market competition.

The German digital bank Trade Republic has officially launched a branch in Portugal, authorized by the Bank of Portugal (Banco de Portugal or BdP). Customers can now obtain a Portuguese IBAN (PT50) and earn 3% interest on balances up to 50,000 euros, with the bank aiming to double its current base of 200,000 customers within a year.

The European Commission has advised against general corporate income tax cuts, labeling them an inefficient way to stimulate investment. In its 2026 Annual Fiscal Report, the commission suggests that Portugal should instead focus on targeted measures such as investment tax credits and accelerated depreciation to support technological and energy transitions.

Galp has announced that the agreement to merge its refining and marketing businesses with the Spanish company Moeve has been pushed to the second half of this year. Despite the delay, the company reports that negotiations are progressing constructively. Meanwhile, Galp noted a 175% increase in its refining margin during the second quarter compared to the same period in 2025.

Inspections conducted by the Tax and Customs Authority (Autoridade Tributária e Aduaneira or AT) identified 642 million euros in unpaid taxes among large taxpayers, marking a 6.64% increase from the previous year. The corrections primarily focused on Value Added Tax (Imposto sobre o Valor Acrescentado or IVA) and Corporate Income Tax (Imposto sobre o Rendimento das Pessoas Colectivas or IRC). These findings were detailed in the latest report on combating tax fraud and evasion.

Iraqi Foreign Minister Fuad Hussein has formally requested that Portugal reopen its embassy in Baghdad, which has been closed since 2007. Minister of Foreign Affairs (Ministro dos Negócios Estrangeiros) Paulo Rangel stated that the government is evaluating the request, noting that the current financial climate is different from when the mission was originally shuttered. Both nations are currently focused on intensifying economic ties.

The Resolution Fund (Fundo de Resolução) will begin repaying the state for the Banco Espírito Santo (BES) bailout starting at the end of 2026. Although the fund received proceeds from the sale of Novo Banco, it previously deferred repayments because it was not required to pay interest. The banking sector will also receive partial reimbursement as part of this process.

Galp expects its new Innovation District project, located on the site of the former Matosinhos refinery, to generate approximately 100,000 jobs. The development is projected to contribute roughly two billion euros annually to the Portuguese economy over the next 30 years. Construction is expected to transform the industrial site into a major hub for economic activity.

Prime Minister Luís Montenegro officially presented Amália, a new artificial intelligence model developed entirely in Portuguese. The government has increased the total investment in this project to seven million euros, emphasizing the importance of a national AI strategy. While the model is currently in a testing phase, officials intend to make it available to public administration entities by the end of the year.

The European Commission has formally confirmed that Portugal has fulfilled all commitments under the restructuring plan for the national airline, TAP. This closure marks the end of a process initiated in 2021, which involved a 3.2 billion euro state injection to stabilize the company's finances.

The national airline TAP Air Portugal has successfully concluded a 350 million euro debt issuance, consisting of senior bonds with a 4.750% interest rate maturing in 2031. The operation was increased by 50 million euros beyond the initial target, which the company's finance director, Renato Inácio, cited as a sign of strong investor confidence.

Recent demographic data shows that Portugal's population growth is driven exclusively by immigration. Experts note that foreign workers are essential to the country's economy and the maintenance of basic public services, warning that the nation would face significant challenges without this workforce.

The International Monetary Fund (Fundo Monetário Internacional or FMI) has recommended that Portugal increase labour market flexibility to boost productivity and encourage companies to offer more permanent contracts. The FMI suggests that making dismissals easier would incentivize businesses to move away from short-term hiring. This recommendation follows the recent parliamentary rejection of the government's own labour reform proposals.

Prime Minister Luís Montenegro has announced the creation of a sovereign wealth fund intended to allow the state to invest in strategic sectors. While the government has presented the fund as part of a broader entrepreneurial agenda, the proposal has faced criticism from some observers who question the lack of specified funding and the state's capacity to generate the necessary revenue.

Prime Minister Luís Montenegro announced plans to create a sovereign wealth fund to allow the state to hold stakes in strategic sectors like energy, banking, and telecommunications. While the government aims to boost national resilience, the Iniciativa Liberal (Iniciativa Liberal or IL) party has criticized the proposal, warning against increased state involvement in private business.

Recent data shows Portugal has the fourth-lowest productivity in the European Union, with the indicator declining in 2025. While Portuguese workers average 37.4 hours per week compared to the EU average of 35.9, the value created per hour remains significantly lower. Experts note that improving this requires greater investment in technology, capital, and business scale.

Paulo Macedo, the CEO of Caixa Geral de Depósitos (Caixa Geral de Depósitos or CGD), has advocated for increasing salaries for public administration officials. He argued that these wages should no longer be indexed to politicians' salaries and suggested that the state should offer more flexibility in rewarding top-performing employees to improve public service quality.

Prime Minister Luís Montenegro has warned that the government, companies, and universities must actively prepare to compete for the upcoming European Competitiveness Fund. He emphasized that the country cannot afford to be unprepared for these new European funding opportunities.

A study by the consulting firm William Russell has ranked Portugal as the ninth most welcoming country globally for expatriates and migrants. The report awarded the country a score of 7.47 out of 10, citing a positive balance between legal entry access and the capacity of the national labour market to integrate foreign workers.

A 400 million euro investment in industrial expansion and energy sustainability was inaugurated at the Aljustrel mine in the Beja district. Prime Minister Luís Montenegro described the project as a significant advancement for modern mining in Portugal.

Prime Minister Luís Montenegro has successfully negotiated an increased national envelope for Portugal in the upcoming European Union budget. This follows a direct request to European Commission President Ursula von der Leyen, potentially securing an additional 1.6 billion euros for the country. Separately, the government has authorized 130.4 million euros in support for Ukraine for the current year.

The European Central Bank (Banco Central Europeu or BCE) is widely expected to increase its benchmark interest rate by 0.25 percentage points to 2.25% during its meeting this Thursday. Economists and investors anticipate the move as a measure to curb inflation, which the central bank aims to stabilize at 2%.

Update: Finance Minister disagrees with ECB interest rate hike

The ECB confirmed the 0.25 percentage point increase to 2.25% on Thursday, citing inflationary pressures from the ongoing conflict in the Middle East. Portuguese Finance Minister Joaquim Miranda Sarmento stated he respects the decision but disagrees with the move, arguing that the current economic crisis differs from 2022 and that the hike was not necessary.